Bahrain firms file new plea against worker fee

Manama, September 16, 2013

Businessmen in Bahrain are set to launch a second petition this week against the reintroduction of a tax on foreign workers, a report said.

Five thousand people signed a petition submitted to the office of HRH Prime Minister Prince Khalifa bin Salman Al Khalifa on September 4, reported the Gulf Daily News (GDN), our sister publication.

However, even more signatures will be gathered after the Labour Market Regulatory Authority (LMRA) resumed collecting the fees from employers at the start of the month.

Each company is supposed to pay BD10 ($19.66) a month for each expatriate employee and BD200 to renew their work permits, but the tax was shelved in April 2011 to help businesses recover from the effects of unrest.

Businessman Hisham Mattar is spearheading the petitions, despite authorities halving the tax for businesses with no more than five foreign workers.

"It makes no sense to pay these fees at this stage as businesses are still recovering after the economic meltdown," he told the GDN.

He suggested the business community should be consulted on the foreign worker tax.

"There could be surveys or even voting so that both parties understand the situation and try to find a common solution," he said. "Another suggestion is to charge employers based on the salary of their workers."

He also argued that the expat fees should have been halved for all companies, not only small businesses with less than five expat workers.

"I think a BD5 fee across the board for each expat worker employed is reasonable and many would agree to pay," said Mattar.

He claimed businesses were still suffering from the economic impact of the global downturn and political unrest since 2011 - with some unable to even pay their staff.

In addition, he argued owners of companies that did not pay were being unfairly penalised by having their commercial registrations (CRs) frozen, meaning they could not complete business transactions or hire new foreign workers.

"We are treated as criminals as our case is then referred to the Public Prosecution," he said.

The LMRA collects the funds, which are then used by Tamkeen to support programmes designed to tackle unemployment, such as providing training for jobseekers and financial assistance for start-up firms.

LMRA chief executive Ausamah Al Absi said authorities would review the fees every three months.

"We don't expect the levy to have a major impact for at least a year following its introduction," he told Reuters TV. "Also, we will be constantly reviewing it every three months, but we don't expect there to be any changes."

He added the fees had been reinstated due to an improvement in the economy.

"The reintroduction of the levy came after a review of the economy and its performance and the increase in demand for foreign workers," he said.

"The continual increase in applications for foreign workers shows the economy is on the right path and, from this perspective, it is an important factor that we need to look at.

"Regarding the performance of the economy, I think the expected growth of small businesses is the main factor behind this levy." – TradeArabia News Service